Transcript
Episode 11 – Advice & Tips from Dave Twombly with 4 Buyers Real Estate LLC
Introduction 00:00
This is Listen Up Home Buyers. The only podcast offering Home Buying advice and tips from true buyer agents and now here’s your host, Victoria Ray Henderson.
Victoria Ray Henderson 00:10
On this podcast I’m excited to have our guest who is an Exclusive Buyer Agent. Welcome to the podcast, Dave Twombly.
Dave Twombly 00:17
Thanks for having me.
Victoria Ray Henderson 00:18
We’re in the middle of a pandemic right now, how are you helping Home Buyers at this time?
Dave Twombly 00:24
It’s difficult. But your timing is pretty good. Because I was helping somebody today, we are not really doing any showings, we in Massachusetts have a restriction on being out and about and although real estate agents were deemed essential, so we could be out working both my broker and my wife don’t want me to be out showing properties and I don’t really want to be out there, either I have two small children and I don’t need to risk anything like that. I did, however, have a closing yesterday or two days ago, and that we got under the wire right before all the shelter in place stuff happened. It was very strange. It was the first time I ever did a walkthrough in gloves and a mask.
Today, I actually spoke to a new buyer, or potential new buyer and one of the biggest things we do global pandemic or not, is educate buyers, first time home buyers and try to get people to understand the process and we always feel that educated consumers are better for everybody.
So I had an initial phone call today, like all things are normal with a potential buyer and help educate her about the process and getting started and what needs to happen in order to start the home buying process.
So we still, obviously do plenty of that here. That’s one thing that we can and have been doing. Yes, so it seems like right now the wise thing to do.
Victoria Ray Henderson 01:48
And certainly the thing that you’re doing is to spend your time and your energy preparing your Home Buyer, for when this pandemic or whenever you can get back out and show them properties.
Dave Twombly 02:00
I actually have another closing at the end of the month, everything happened before the shelter in place really took hold. So we were just going through the mortgage process and the parts of the transaction that I’m not involved in day to day just keeping an eye on. So we did a home inspection before everything really hit and tried to do kept our distance. But it wasn’t where we are right now. I honestly don’t know how it trades actually work right now, part of how we run our business and for buyers is that we require that our clients have a home inspection. It’s part of working with us.
If you want to be represented by us with a transaction, it’s part of the deal. We don’t waive home inspection for anybody. I keep wondering how transactions would go because I know there are a lot of home inspectors who don’t want to be out there either. One would do a home inspection by himself as everybody sort of waited in their car for him to come out and talk about it. He might face time, some key issues or things that come up, but it’s going to be hard to find home inspectors, and people to get out there. I know, we are also one of the big changes that happened in a transaction haven’t messed [phonetic 03:14] up was that the fire department is no longer sending out guys to do the smoke certificates to take all of the smoke detectors in houses.
Victoria Ray Henderson 03:23
Well tell me about that. How is that part of your home buying process?
Dave Twombly 03:27
That is the absolute last thing that happens in a transaction at least in Massachusetts. So you have your mortgage, you’re all set to go, you have the clear to close, get your money and the last thing that happens is that the fire department goes through the property to make sure that all the smoke detectors are in working order and they sign off a smoke certificate and we have to have that in hand in order for the deal to close.
Victoria Ray Henderson 03:56
That’s fantastic. But we don’t have that here in the Washington DC area. The fire department is not involved in any home buying transaction.
Dave Twombly 04:04
In Massachusetts you can have your money, you can have your cheque sitting at the closing table and ready to go and if we don’t have the smokes written, we’re not closing now. Typically, that is incumbent upon the seller and the listing agent to take care of so usually what happens the listing agent will schedule the smoke certificate or the walkthrough with the fire department. Oftentimes you’ll see agents have 5 or 10 smoke detectors in their car so they can stick them up if need be, if they’re missing, and then the fire department sign off. So what’s happening now is actually it is responsibility of the buyer after I think within 90 days of what weighs being lifted. Any buyer who has purchased that period of time hashtag have the fire department come [Inaudible 04:54]
Victoria Ray Henderson 04:53
We frequently tell our buyers to just purchase new smoke detectors ones that have the 10 year battery so that then you know that it’s working because you’ve installed it or had someone install it. Yes, that’s the first I’ve heard of that.
Dave Twombly 05:06
No, it’s totally incumbent upon the seller and the listing agent to get it done a deal. I mean, I’m not involved in this process at all, except making sure that we have a smoke certificate, there’s new language in the purchase and sale agreement that it is now the responsibility of the buyer of the home purchaser to get this done and it has to happen within 90 days of whenever we lift the shelter in place band. So, that’s a change an impact that we had now have to educate our buyers about and this now on you to make sure this gets done.
Victoria Ray Henderson 05:40
So what areas do you serve in Massachusetts?
Dave Twombly 05:43
So we are located in Cambridge, Massachusetts, which is right across the river from Boston. Most of our businesses in the what I call the side of the river, we’re across the Charles River from Boston, suburbs, Cambridge, Somerville, Watertown, Waltham everything that is west of the river, although I have started branching out to the Boston side of the river as well. So for the most part, we, I think, as a company, we will go almost anywhere within reason, I’m not going to drive an hour in one direction. When I was a younger, hungrier agent, I would have but now that I’m sad and happy I don’t drive that far. So anything around the Boston area, for sure.
Victoria Ray Henderson 06:25
That’s good. I mean, you have to and we just like you, I’m an exclusive buyer agent. We are licensed in Maryland, Virginia, and the district and the reason we are is because very often, someone will start their search on one side of the river, we’ve got the Potomac River in our case, and they’ll say, you know, I’m not really sure about the commute here, maybe I need to be looking in Maryland, or vice versa, or the district. So if you’re not licensed, you’ve got to be able to serve everybody in all three areas.
Dave Twombly 06:53
That’s different here, at least, you know, we have enough in the Boston area to satisfy us. So we don’t have to be traveling to New Hampshire or Vermont. But I would need a separate license to do that, anyway.
Victoria Ray Henderson 07:03
Absolutely. That’s right. So you talked about educating your buyers. Walk me through the process.
Dave Twombly 07:08
We work with a lot of first time homebuyers. You know, we’ve all had our repeat customers and people who have bought properties before but by and large, I would think a bulk of my clientele are first time homebuyers. You know, sometimes people have some sort of passing knowledge. You know, the woman I spoke to they actually her mom was a real estate agent in New Jersey. So she at least had a sense, but I know everything differs by state about how transactions work.
So we educate them about everything. You know, the first thing you need to do, this is the conversation I had today, the very first thing you need to do is talk to a lender to see what you actually can afford. The conversation started with: You know, I have this much money to put down and I don’t know, like what I can and what I can’t do and oh, the first thing you need to do is, is talk to a lender and see what you are going to be pre-approved for and how much you can spend, because every other conversation I would tell you to have after that might be moot if you realize that you are not in a position to buy right now.
So we talked about getting educated in terms of the financial means and then I like to educate buyers about houses.
One of the things that we— that is one of the pitches that I always make to new potential buyers, I am never going to make an offer on a house that I have not seen myself and we actually limit the amount of clients that we take on at a time, because we walk through every property with you because I need you, as my buyer to understand the anticipated costs coming down the line.
So not only are you about to spend a million dollars on this house, but you need to know that the roof is old and in 5 years, you can expect to spend $15,000 to replace the roof or the boiler is old and that’s going to cost you $7500 next year or the foundation is rickety, and we need to get out of here right now.
Victoria Ray Henderson 08:50
I’ve been in a few of those.
Dave Twombly 08:51
You know, we all have. So you know what, you need to be prepared to hit the ground running, because I’m assuming it’s been the same in the DC area. But in the Boston area. You know, we’re one of the most expensive real estate markets in the world and it’s been a seller’s market for pretty much the entirety of my career as a buyer’s agent.
Victoria Ray Henderson 09:10
Mine too I mean, it’s over 10 years.
Dave Twombly 09:13
Yes, it’s been incredibly difficult for buyers to properties, because every property has a multiple offer situation. People are waiving all of their contingencies giving up all of their rights and that’s something that we talk about, too, is educate about your rights.
Victoria Ray Henderson 09:30
Yeah, because the most important thing is to make sure– First of all, that they’re comfortable help moving ahead, but to make sure that they understand all the different ways that they are protected and if they decide to for example, if it’s a condo in our area brand new, if they decide to waive the home inspection, at least we tried to get a pre-contract Home Inspection in, before they do something like that. We just did that last week. It was a very unusual experience where we had our home inspector in the house using what’s app communicating with the buyers who were out in the car. I’m standing outside, we got it done. But just like you, we don’t want anybody to ever get into a situation especially when it’s the biggest purchase of their life that they regret.
Dave Twombly 10:12
Right I had a brand new buyer who I’d worked with. I have shown a couple houses too I actually had yet to sign a contract– haven’t signed a contract yet. Usually I like to go out to a couple showings first to make sure that they’re comfortable with me, and I’m comfortable with you, before we agree to. Beside the contract, I always say that we should date before we get married.
So I had a buyer, and we’ve been out a couple times, and he wanted to work with me, and a property came up that was in a perfect location. It was an ideal location for this guy and he wanted to see it and this is just when everything hit with our shelter in place, and the house was occupied and I know the listing agent very well, she’s very close friends with my broker and with our firm, we do a lot of good work together, he wanted to see the property, I was not comfortable showing the property.
My broker was not comfortable with me showing the property, my wife said, you can go show the property, but you can’t come back into the house. I decided not to show the property and this is a $1.3 million buyer. So not someone I really want to let go. But I said Listen, man, I am not comfortable doing the showing if you need to see it. You know, I completely understand, I can’t be the guy to help you. So he went out with an agent that he’d spoken to a couple times prior to meeting me. He went to the— he loved it. He made an offer. He got his offer accepted and which made me scream expletives in the background, but it is what it is. However, he was not educated about the buying process by the agent that he worked with.
So he did a pre-inspection. Because the agent suggested that he do to make his offer more attractive. He got an offer accepted. He did a pre-inspection offer accepted. But then he wouldn’t be able to have another inspection after the fact. Because this was not explained to him. [Crosstalk 12:10]. So he actually called me up and he’s like, “Listen! I don’t want, I know I’m not working with you. But can I please ask you some questions?” And I said, “Of course you can” and he told me about what happened, he told me that he had no idea that he wouldn’t be able to get the house inspected after the fact, and was incredibly nervous and didn’t know what to do and now he had, I don’t know how the process works in the DC area. But here you put down a binding deposit, when you make an offer, he put down a $5,000 deposit on the property, about to buy on the deal and the housing stock in Massachusetts is incredibly old, everything is 100 years old.
He was just incredibly nervous about the deal, and didn’t really want to go through that because he hadn’t been educated about the process of having a home inspection or pre inspection what that means.
Victoria Ray Henderson 13:04
I have two questions for you real quick. The pre inspection is a limited inspection and so this agent that was working with him did not explain that that in fact, was what he was getting and then the second question would be, who holds that $5,000 deposit.
Dave Twombly 13:21
So that’s the listing agents firm. So once you get the offer accepted. You know during the offer, we send an offer, and we just send a picture of the check right, made out to the listing agent firm. Once the offer gets accepted the listing agent, then we took over the check of the listing agent, and they hold it in escrow and then that deposit rolls into your down payment and you purchase and sale.
So, I was talking through it, I was listening, maybe talk to the inspector, see if he’ll give you some more insight or more information about the problem, you know what he saw, but usually, as you said, with a pre-inspection, they’re much more slimmed down and you don’t get the follow up that you would with a normal inspection and he was willing to lose the $5,000 as a very expensive education and walk away from the deal and the moral of the story is he wound up walking away from the deal. He did get his $5,000 back, he got his deposit back and when this all shakes out, he’s going to come back and work with me.
Victoria Ray Henderson 14:22
Yeah, good for you.
Dave Twombly 14:23
Now this other agent lost out on a huge commission, because he just didn’t educate the buyer.
Victoria Ray Henderson 14:29
Yes, but I think a lot of times buyers are not given the representation that they’re needed. It’s almost like a fuel for the fire. So something interesting, though, that you mentioned about having the listing agent, that brokerage hold the escrow or the earnest money deposit. It’s not like that here at all. We have a settlement attorney or a settlement office that holds that money or we hold it in escrow for them, because if the deal falls apart, we try to protect that earnest money deposit as much as possible?
Dave Twombly 15:00
Well, and this is obviously a completely different here. So the listing agent holds and you know, typically that earnest money deposit is tied to your home inspection contingency. So if the whatever number you put in for the home inspection contingency is met, then you could walk away citing the home inspection contingency and get your money back and the risk that you make if you’re either waiving home inspection, or if you want to walk away and you haven’t met that contingency number is that you risk that deposit that you put out?
Victoria Ray Henderson 15:30
Yes, that’s a completely different scenario than here,
Dave Twombly 15:33
We actually use that as an advantage or tip when we’re competing with people who are not– who are waiving their home inspections, your ego will do a higher deposit and a higher inspection contingency, which shows that– You know what, we’re not really going to walk away from this deal. You’re not going to nickel and dine you over small things that come up during home inspection. But you know, there’s a risk involved with putting that money down. Had I been his agent for this deal in these times. I would not have had done that high of a deposit, because I don’t feel that we would have needed to and we would not certainly not have waived the home inspection, because the market has been softening and he actually got his offer accepted. On the first weekend I think was like $60,000 below the asking price.
Victoria Ray Henderson 15:33
Oh, my goodness.
Dave Twombly 15:49
When he told me that I was like, well, then you obviously didn’t need to waive Home Inspection because you were the only offer. Yes, fortunately, he got his money back. He got it, for sure and he’ll come back and work with me.
Victoria Ray Henderson 16:28
So let’s talk a little bit about the market. You’re saying that you’re getting a feeling like it might swing more toward in favor of buyers?
Dave Twombly 16:35
Yes and I saw that off last year, too. So in the beginning of last year, 2019, I had an extremely fast start to my year, where almost every client got their first offer accepted.
Victoria Ray Henderson 16:49
Wow, wonderful.
Dave Twombly 16:50
Yes, it was great and I live in Cambridge, Massachusetts, in addition to working here, which is one of the most ridiculous markets in the country and last year, for the first time in my career as a real estate, I could easily rattle off 5, 6, 7 properties that sat on the market, in my little neighborhood alone and when we say sit it on the market, it means it didn’t sell the first weekend.
Victoria Ray Henderson 17:19
Well, yes, I know what is you mean.
Dave Twombly 17:21
Because everything here will open house Saturday, Sunday offers due Monday or Tuesday under agreement by Wednesday and off to the race next door. So places had been sitting for at least a week, two some days long.
Victoria Ray Henderson 17:33
That is nice for buyers.
Dave Twombly 17:34
It was nice for buyers and it was interesting, because there were still properties going well over the asking. But the difference was that instead of getting 10 offers– Like they would two years ago, they were getting two offers. So intensity was lessening, it seemed to be shifting towards the buyers and I think that was going to continue– Even without COVID-19 I think that was going to continue along this year and we really think that once we get through this, it’s going to be a buyers’ market, or I don’t want to say buyers’ market, but it’s still moving further towards buyers.
Victoria Ray Henderson 18:09
You know, I’ve been thinking a lot about what it’s going to be like on the other side and on the other side is going to be essentially when we get a vaccine, so we’re all going to still be practicing some very safe ways of showing properties. But I do think we are going to get slammed with people who need housing, because so many people have been putting it on hold and here, the only people I’m going out with are the ones who essentially won’t have a place to live unless we find something. It’s a challenging thing now, but I know a lot of people are going to be out there looking for a property in the fall market. So the fall market could probably be like the spring market.
Dave Twombly 18:46
So you think there’s going to be pent up demand?
Victoria Ray Henderson 18:48
I do because particularly you’re in a major city too. We have a lot of military. They’ve got to be here, you know, they just have got to find housing.
Dave Twombly 18:58
Do you think that there’s also going to be a backlog of properties have been listed now that are going to hit the market?
Victoria Ray Henderson 19:05
I’ve talked to so many listing agents who say that their clients are not putting their houses on the market because they don’t want people walking through. They’ve got babies, they have elderly all that stuff. I think we are all going to be very busy and slammed which is why now is the time to make sure that people educate themselves. Listen to podcasts like this and ask questions, interview every agent and ask them the hard questions.
Dave Twombly 19:32
That’s exactly the conversation I had with my potential buyer today. Now is the time to get all your ducks in a row even you’re not just with your lender interview home inspectors right now. So you choose the home inspector you want to work with. Find your interview attorneys right now. So you find the attorney you want to work with. Get all these pieces. I would love all my clients to do this ahead of time. Anyway, which doesn’t always happen but now no one has to do except call a home inspector and interview them and see if they fit with your— Answer the questions that you want to work with and get all your stuff lined up now so that we can just hit the ground running and then hopefully off to the races. If you’re in the Boston area and you want to buy a house you should look up 4 Buyers Real Estate
Victoria Ray Henderson 20:19
Well, Dave Twombly with 4 Buyers’ Real Estate. Thank you so much for joining me on Listen Up Home Buyers. I really appreciate you taking the time.
Dave Twombly 20:26
Oh, it was wonderful to be here. I really appreciate you reaching out to me and wanted me to be podcast and I will look forward to listening to it.
Introduction 20:37
You’ve been listening to Listen Up Home Buyers. The only podcast offering Home Buying advice and tips from true buyer agents.